A New Model for the Calculation of Customer Life-time Value in Iranian Telecommunication Companies

Document Type: Original Research

Authors

1 Assistant Professor, Department of Industrial Engineering, Alzahra University, Tehran, Iran

2 Assistant Professor, Department of Industrial Engineering, Ferdowsi University of Mashhad, Mashhad, Iran

3 Department of Industrial Engineering, Alzahra University, Tehran, Iran

Abstract

In this paper, we proposed a new model to evaluate a customer's lifetime value, considering non-financial elements such as the customer’s churn probability, cooperation capability, willingness to refer, willingness to recommend, and innovation. We tested our proposed model on customer data from a mobile phone operator to evaluate the effect of each element on the customer's lifetime value. Four hundred and twenty questionnaires were distributed and 400 questionnaires were determined to be suitable for our study. We employed structural equation modeling using Smart-PLS software and we have found that the innovation, customer’s churn, willingness to refer, and cooperation elements have the strongest effect on the customer's lifetime value.

Keywords


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